With the new federal fiscal year that began October 1, 2011, Congress is making slow progress in advancing spending bills to cover federal discretionary programs, including mental illness research, services and housing programs. It is likely to be several weeks before these bills are finished and combined into an “omnibus appropriations” bill for FY 2012. In the meantime, Congress has put into place a temporary “continuing resolution” to keep all discretionary programs operating at current FY 2011 levels through November 18, 2011.

Neither the House nor the Senate is expected to act on their spending bills in October. Instead each side is expected to negotiate with the Obama Administration on specific funding levels and agree on a single omnibus spending bill that would go to the President shortly before the November 18 deadline.

It is important to note that all of these federal discretionary programs are subject to strict limits that are now in place as part of the debt limit extension agreement reached between the President and Congress in August. These caps will limit overall spending for FY 2012 at or near FY 2011 levels and will restrict discretionary spending for the coming decade. As a result, most programs will be frozen at FY 2011 levels and in many cases cut in order to accommodate increases in other programs.

Read further for a detailed analysis of proposed FY 2012 funding levels for mental illness research, services and housing programs.

Mental Illness Research at NIMH

The draft Senate Labor-HHS bill for FY 2012 would impose the first reduction for the National Institutes of Health (NIH) in decades – cutting funding by $190 million. This is a limited reduction given the overall $30.8 billion budget for NIH. Within NIH, the National Institute of Mental Health (NIMH) would see a slight $17 million reduction under the Senate bill to $1.46 billion. By contrast, the House bill would fully fund the President’s FY 2012 request of $1.571 billion, which is $40 million above the current FY 2011 level of $1.477 million.

It is important to note that under either proposal, NIMH will continue to struggle to adequately fund research protocols in FY 2012, as even the President’s budget holds NIMH below “medical research inflation” – the annual escalation in research cost. In addition, NIMH has nearly $700 million in “out-year” commitments (44% of the NIMH budget), that are multi-year grants for ongoing basic research and clinical studies. Holding the NIMH budget at or near a freeze for FY 2012 will likely lower the Institute’s “pay-line” to 15 percent. In other words, 85 percent of “new and competing” research grants (that get through peer review and are deemed meritorious science) will not receive funding.

On a positive note, the report accompanying the Senate bill contains language specifically directing NIMH to develop and coordinate a research program to examine early mortality and medical co-morbidities experienced by adults living with serious mental illness, a major priority for NAMI. This language directs NIMH to work with other NIH institutes responsible for diabetes and heart disease on focused research on individuals living with serious mental illness:

Premature Mortality: The Committee continues to be concerned about premature mortality and lower life expectancy experienced by adults living with serious mental illness as result of treatable medical conditions such as cardiovascular, pulmonary, endocrine and infectious diseases. The Committee urges NIMH to collaborate with other institutes including NIDDK and NHLBI on a focused research program into the causes and interventions needed to address this crisis. The Committee requests an update on this topic in the fiscal year 2013 budget justification.

Mental Health Services at SAMHSA

Funding for most mental health services programs for FY 2012 at the federal Substance Abuse and Mental Health Services Administration (SAMHSA) would be frozen at current (FY 2011) levels in both the House and Senate bills. This includes the Mental Health Block Grant (MHBG) program at $421 million. Neither the draft FY 2012 House nor Senate bills include the President’s proposal to boost funding for the MHBG by $14 million. However, this increase was intended to hold the program harmless for an expected data infrastructure “tap,” a $14 million assessment to enhance data collection methods. Other programs subject to a freeze at current levels in both bills are the Children’s Mental Health program ($117.8 million) and the PATH program ($65 million), an outreach and engagement program for homeless individuals living with mental illness. The draft Senate bill also continues the SAMHSA “primary-behavioral health integration” grant program at $62.8 million. This is an important initiative designed, in part, to integrate primary medical care into specialty settings such as CMHCs to address chronic medical conditions experienced by people living with serious mental illness.

At the same time, the draft House bill does impose a substantial $166 million cut to the Projects of Regional National Significance (PRNS) account at SAMHSA’s Center for Mental Health Services. This account funds a variety of ongoing service demonstration and technical assistance activities at the agency. For FY 2011, PRNS was funded at $349.9 million. It is unclear at this point which activities within PRNS would be discontinued under the House bill. Neither the House nor the Senate bill funds proposed initiatives from the Obama Administration on new mental health prevention grants ($90 million).

Housing & Homelessness Programs

FY 2012 funding for housing and homelessness programs is included in the Transportation-HUD Appropriations bill. Both the House and Senate Appropriations Committees have moved their versions of the “T-HUD” bill forward. The House bill fully funds the President’s request for the HUD Section 811 program at $196 million for FY 2012.

HUD Section 811 program provides capital advance grants and project-based operating assistance to non-profit disability organizations to develop permanent supportive housing for non-elderly people with disabilities, including serious mental illness. By contrast, the draft Senate bill freezes Section 811 at its current FY 2011 level of $150 million. Within this total, both bills allocate $85 million to renew (and make amendments to) existing project-based assistance contacts (PRACs) that cover the operating costs of current 811 units. While the level in the Senate bill is lower, it does direct HUD to allocate as much as $65 million in funding for new units to the “PRAC-only” option authorized in the Frank Melville Supportive Housing Investment Act that passed Congress in 2010. This would allow Section 811 to develop as many 2,000 new units in FY 2012, as opposed to fewer than 500 new units under the existing capital advance-PRAC model.

Both the House and Senate bills allocate $1.9 billion for programs under the McKinney-Vento Homeless Assistance Act. This is below the $2.37 billion proposed level in the President’s FY 2012 budget. Both the House and Senate bills do fund the President’s request for an additional $75 million for rental vouchers for the joint HUD-VA VASH program, which provides supportive housing and services for homeless veterans. Neither the House nor the Senate bill funds the President’s request for $56.9 million for a joint HUD-HHS initiative for to assist both homeless families and chronically homeless individuals. This would have funded as many as 7,500 rental vouchers, to go along with services provided by HHS, including SAMHSA.

Social Security Administrative Funding

Monthly Social Security benefits (including SSI and SSDI cash assistance) are mandatory programs funded outside of annual discretionary appropriations bills. However, the Social Security Administration’s Limitation on Administrative Expenses (LAE) budget is funded annually as a discretionary program. This funds local SSA offices as well as state DDS (disability determination) offices that adjudicate claims and appeals for SSI and SSDI benefits. Adequate funding for the SSA LAE is therefore critical to ensuring that the agency and the DDS offices have the capacity to hear claims and appeals for eligibility and serve current beneficiaries in a timely fashion.

For FY 2012, the President proposed an LAE level of $12.4 billion, a $1 billion increase over the FY 2011 level of $11.4 billion. The draft Senate Labor-HHS bill includes an LAE of $11.63 billion and proposes an increase of $139 million for “program integrity” which includes funding for “continuing disability reviews” (CDRs) for current beneficiaries.

Criminal Justice Programs

The Mentally Ill Offender Treatment and Crime Reduction Act (MIOTCRA) authorizes funding for grants to facilitate collaboration among criminal justice and mental health systems to improve access to treatment for people living with severe mental illness and co-occurring substance use disorders who are involved with criminal justice systems. These grants fund a variety of programs, including CIT, jail diversion, Mental Health Courts and community reentry services.

In FY 2011, $9.6 million in funding was provided for the MIOTCRA program. The Senate Commerce, Justice, Science and Related Agencies (CJS) bill contains $9 million in funding for MIOTCRA in FY 12. The House CJS bill contains $9.9 million in funding for MIOTCRA in FY 12. Both the Senate and the House rejected a proposal by the Obama Administration to consolidate the MIOTCRA program into a broad, “problem-solving court” initiative. NAMI opposed the Administration’s proposal because of concerns that this consolidation would have jeopardized funding for mental health and substance use specific programs.

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